Introducing Globalization

and its Impact on Human

Life, Factor Responsible to
Globalization
What is Globalization?
“It is associated not only with an increasing cross boarder movement of goods, services,
capital, technology, information, people, but also creates an organization of economic
activities which crossed national boundaries.”-Professor D. Nayar.
“Where globalization means, as it so often does, that the rich and powerful now have
new means to further enrich and empower themselves at the cost of the poorer and
weaker, we have a responsibility to protest in the name of universal freedom.”- Nelson
Mandela.
Marshal McLuhan was the exponent of globalization. It is a process of pervading
everywhere and all the time. Globalization is a force linking people around the world
with increased trade, investment, technology, education, information and
communication.
 Globalization refers to the fact that we all increasingly live in one world, so that
individuals, groups and nations become interdependent and more integrated.
Globalization has an influence on both domestic and international affairs of the
countries. However, globalization has brought mixed effects on national, economy,
politics, society, ecology and family of a developing countries like ours.
According to Marcuse, globalization is-
a) Greater mobility of capital
b) Greater mobility of labor
c) Rapid development of communication technology
d) Computization
e) Worldwide manufacturing to services
f) Integration of all economics in a single market
g) Decline of nation state
h) Homogenization of culture
Factors contributing to Globalization
1. The rise of information and communication technology
2. Information flow
3. Economic factors: a) Transnational Corporation b) Multinational Corporation c)
Electronic economy
4. Political change: End of the Cold War, the collapse of soviet style communism
❑ Characteristics of Globalization:
1. Free Travel
2. Expansion of Business
3. Movement of goods
4. Spread of money
5. Globalization Debate
Globalization Debate
Hyperglobalizers Sceptics Transformationalists

What’s new? A global age Trading blocs, weaker Historically unprecedented

geo-governance than in levels of global
earlier periods inter-connectedness.
Dominant features Global capitalism, global World’s less interdependent ‘Thick’ globalization
governance, global civil society. than in 1890’s

Power of national declining Reinforced or enhanced restructured

governments
Driving forces of Capitalism and technology Governments and markets Combined force of
globalizations modernity
Pattern of Erosion of old hierarchies Increased marginalization of New architecture of world
stratification South order
Summary argument The end of the nation-state Internationalization depends Globalization transforming
on government acquiescence government power and
support. world politics.
❑ The globalization of markets
▪ The globalization of market refers to the merging of historically distinct and separate
national markets into one huge global marketplace. The tastes and preferences of
consumers in different nations are beginning to converge on some global norm, thereby
helping to create a global market. Technological innovations and low cost global
communication have facilitated the globalization of market. Ex-Citigroup credit card,
Coca-Cola soft drinks, McDonald’s hamburgers, Gap jeans KFC.
▪ National differences in tastes and preferences are still often important enough to act as
brake on globalization.
▪ Electronic economy: Bank corporations, fund managers and individual investors are
able to shift funds internationally with the click of a mouse.
▪ Bit coin
❑ The globalization of production
The globalization of production refers to the sourcing of goods and services from locations around the globe
to take advantage of national differences in the cost and quality of factors of production(such as labor,
energy, land and capital). By doing this, companies hope to lower their overall cost structure or improve the
quality or functionality of their product offering.
❑ The emergence of global institutions
As markets are globalize and increasing proportion of business activity transcends national borders,
institutions are needed to help manage, regulate, and police the global marketplace, and to promote the
establishment of multinational treaties to govern the global business system.
A number of important global institutions have been created to help perform these functions, including the
General Agreement on Tariffs and Trade(GATT) and its successor, the World Trade Organizations(WTO),
the International Monetary Fund(IMF) and its sister institutions, the World Bank and the United Nations.
❑ Drivers of globalization
Two main factors underline the trend toward greater globalization. The first is the decline
in barriers to the free flow of goods, services and capital that has occurred since the end of
2nd world war. The second factor is technological change, particularly the dramatic
development in recent decades in communication, information processing and
transportation technologies.
a) Declining trade and investment barriers
International trade occurs when a firm exports goods or services to consumers in
another country. Foreign Direct Investment occurs when a firm invest resources in
business activities outside its home country.
Many of the barriers to international trade took the form of high tariffs on imports of
manufactured goods. The typical aim of such tariffs was to protect domestic industries
from foreign competition. The lowering of trade barriers made globalization of markets
and production a theoretical possibility.
In 1993, the Uruguay Round by GATT has reduced trade barriers,
extended GATT to cover services as well as manufactured goods,
provided enhanced protection for parents, trademarks, and copyrights,
and established the World Trade Organization to police the international
trade system.
b) The role of technological change
Since the end of 2nd world war, the world has seen major advances in
communication, information processing, and transportation technology,
including the exclusive emergence of the Internet and world Wide Web.

Telecommunication is creating a global audience. Transportation is

creating a global village.
i. Microprocessor and Telecommunication
▪ Enabled the explosive growth of high-power, low-cost computing vastly increasing the
amount of information that can be processed by individuals and firms.
▪ Global communications have been revolutionized by developments in satellite, optical
fiber, wireless technology, internet and the world Wide web. Ex: CNN, MTV and HBO
are received in many countries.
▪ The cost of microprocessor continues to fall while their power increases . This lower
the cost of coordinating and controlling a global organization.
i. The internet and World Wide Web
The explosive growth of the www since 1994 has developed into the information
backbone of the global economy. The web makes it much easier for buyers and sellers to
find each other, whatever they may be located and whatever their size.
i. Transportation Technology
The development of commercial jet aircraft and super-freighters and the introduction of
containerization, which simplifies transshipment from one mode of transport to another.
Transportation cost associated with the globalization of production have been decline, real
cost of information processing and communication have fallen dramatically.
Example:
1. hospitals in Chicago can send MRI scans to India for analysis
2. accounting office in San Francisco to outsource routine tax preparation work to
accountant living in the Philippines
3. When U.S customers call Dell with a service inquiry, they are routed to Bangalore in
India, where English-speaking service personnel handle the call.
 The Changing Nature of the Multinational Enterprise
a) Non-US Multinationals: In the 1960’s, global business was dominated by large US
multinational corporation. But now Hong Kong, China, South korea, Taiwan
b) The Rise of Mini-Multinationals: The rise of the Internet is lowering the barriers that
small firms face in building international sales. Ex: Generel motors, Ford, Fuji, Sony
etc.

Globalization and the world’s poor

The gap between the rich and the poor nations of the world has gotten wider.
The rise of individualism
Individuals have much more opportunity to shape their own lives than once was the case.
Managing the global market place
The managers of international business differs from domestic business is the greater
complexity of managing an international business. The managers of international business
must decide where in the world to site production activities to minimize costs and to
maximize value added. They also must decide which foreign market to enter and which to
avoid. They must choose the appropriate mode for entering a particular foreign country.
Managing an international business is differ from managing a purely domestic business
for at least four reasons
1. Countries are different
2. The range of problems confronted by a manager in an international business is wider.
3. An international business must find ways to work within the limit imposed by
government interventions in the international trade and investment system.
4. International transactions involve converting money into different currencies.
❑ Impact of Globalization in Bangladesh
1. Economy
2. Politics
3. Society
4. Education
5. Environment
6. Family
7. Global Language
8. Treatment
9. Exploitation of labor